Friday, 19 June 2015

Letter to Minister Rob Davies about alleged corruption at the DTI

Today I wrote a letter to Minister of Trade and Industry Rob Davies requesting him to institute an investigation into corruption in his department.

The allegations of corruption came up during Wednesday's Portfolio Committee meeting where the King of Midlands cooperative described how they were led down the garden path, at a cost of R270 000, but the DTI and a consultant who made promises that were not fulfilled.

I am looking forward to Minister Davies' response.

The text of my letter is below:

19th June 2015

Dr Rob Davies
Minister of Trade & Industry
Private Bag X84

Dear Minister Davies

Request to institute an investigation into corruption at the DTI

I am writing to request that you institute an investigation into alleged corruption within your department.

At Wednesday’s meeting of the Portfolio Committee on Small Business Development and Cooperatives (DSBDC), the Department’s Acting Director-General, Mr Lindokuhle Mkhumane, made it plain that corruption within the Cooperatives Incentive Scheme (CIS) had been suspected for some time.

Before being seconded to the DSBDC, Mr Mkhumane was Chief Director: Infrastructure Investment Support at the DTI, and thus has intimate knowledge of the workings of your Department.

Although the CIS recently migrated from the DTI to the DSBDC, the alleged corruption occurred when it was still under your mandate and control.

The Committee heard of a R3.5 million application for funding in 2012 by the CIS from the King of Midlands cooperative based in Pietermaritzburg. The DTI advised the King of Midlands to seek the advice of a consultant, Sgegede HR and Management Consultants.

Sgegede wanted 10% of the amount applied for, and R150 000 payment upfront plus travel and accommodation costs. In return for this it promised the application for funds would be successful.

To date, King of Midlands has paid Sgegede R270 000, but their funding application has been turned down. They approached the Portfolio Committee Chairperson in a desperate attempt to have their grievances heard, and in doing so uncovered this alleged collusion and corruption.

Suspiciously, the Director of the CIS at the DTI, Mr Phololo Morolo, who had migrated to the DSBDC with the unit, has now returned to the DTI.

The Parliamentary Liaison Officer to the Committee, Mr Noko Manyelo, explained to the Committee the DTI’s practice of record keeping and monitoring will enable the tracing of key information and communications which will assist in the investigation.

The abuse of public funds is a serious offense that robs all South Africans. I request that you institute an investigation without delay and look forward to your response.

Yours sincerely

Toby Chance MP

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